Shoosh

ORGL2300-CASE #1, Due: Week 3, Day 5 at 11:59pm.

WorldCom

Assignment: Please answer the questions at the end of the case thoroughly as possible citing all sources using APA style. This assignment should be between at least 3-5 pages double spaced and written in a narrative form.

Questions For Discussion

1. What are the ethical considerations involved in a company's decision to loan executives money to cover margin calls on their purchase of shares of company stock?

The ethical dilemma is a big one between doing what is looked at as “right” and what is unjust. If they loan the executive money they can keep stockholders and the public from knowing that there might be an issue. However this can be seen as unjust as they are omitting the truth to people whose money they’re risking.

2. When well conceived and executed properly, a growth-through-acquisition strategy is an accepted method to grow a business. What went wrong at WorldCom? Is there a need to put in place protections to insure stakeholders benefit from this strategy? If so, what form should these protections take?

Growth through acquisition is an accepted strategy in most cases (except monopoly issue) however in WorldCom’s case they were not prepared to grow that fast and their ability to grow may have been embellished a bit to the public but I still feel that there should be no protection for stakeholders, if you are willing to risk your money then you know the fact that “high risk, high reward” comes into play. It was your decision to invest and you need to be held accountable, another thing to consider here is that their already is the minimal protection in place that I feel needs to be there to keep companies accountable. Anything above that keeps our market from being a “free market”.

3. What are the ethical pros and cons of a banking firm giving their special clients privileged standing in "hot" IPO auctions?

The biggest pro for a banking firm is as they said it is a good business practice...